India’s April gold imports plunge 39 percent on weak demand: GFMS 

India’s gold imports fell for a fourth straight month in April from a year ago to 57 tonnes on subdued demand after local prices jumped to the highest level in nearly 21 months, provisional data from precious metals consultancy GFMS and bank dealers showed.

The drop in purchases by India, though, could weigh on global prices, which are still up nearly 6 percent from a mid-December trough, despite dropping back from a 17-month high hit at the end of January.

Lower gold imports could also help the South Asian country reduce its trade deficit.

The price rise curtailed retail purchases and also prompted jewellers to postpone re-stocking, Sudheesh Nambiath, a senior analyst with GFMS, a division of Thomson Reuters, said on Tuesday.

Local gold prices jumped to their highest in 21 months in April following gains in the overseas market.

The drop in the rupee to the lowest level in 14 months in April made gold even more expensive for retail consumers and squeezed demand, said Abhishek Bansal, promoter of ABans Jewels Pvt. Ltd, which runs a gold refinery.

India imported 93.6 tonnes of gold in April 2017. Gold imports in the January to April period fell 34 percent from a year ago to 220.1 tonnes, data compiled by GFMS showed.

In April, Indians celebrated the annual festival of Akshaya Tritiya, during which buying of gold is considered auspicious.

“Price rise weighed on Akshay Tritiya demand,” said a Mumbai-based gold dealer.

India’s imports in May would be higher than April, but would be significantly lower than the 119.3 tonnes imported in May 2017, said a Mumbai-based head of the gold trading desk at a private bullion importing bank.

“Slowly, consumers and jewellers are adjusting to higher prices. Wedding season demand is also good,” the bank official said.

Gold is an essential part of a bride’s dowry in India and also a popular gift from family and guests at weddings.